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Sunday, December 4, 2011

MERRIMACK – They are building it. Now the question is, will they come?

By the next holiday season, area shoppers
will have a sparkling new selection of stores available at the
Merrimack Premium Outlets center, currently under construction off Exit
10 of the F.E. Everett Turnpike.

When it opens, likely in June, the $100
million shopping center will consist of 100 upscale clothing, home goods
and other retail outlets, offering products at factory rates. But,
with the general retail market still suffering under the weight of the
national recession, critics may wonder if this is the time or the place
to open a large scale outlet center.

Project managers and retail industry analysts alike answer in a single word: Yes.

“Outlet shopping has become more
integrated into consumers’ shopping routines, which bodes well for the
opening of Merrimack Premium Outlets,” said Michele Rothstein, vice
president of marketing for the project developer, Premium Outlets, which
has projected as much $140 million in annual sales from the center.

“Outlet shopping is a different
mentality,” added Nancy Kyle, president of the Retail Merchants
Association of New Hampshire, which represents 800 businesses across the
state. “Outlets become a destination. … They seem to do well
regardless of the economy.”

Even during a recession, these claims play out in the sales numbers.

Retail sales continue to suffer around the
state and across the country, analysts said. In New Hampshire alone,
several major retail stores, including Building 19 in Nashua and Lowe’s
Home Improvement in Manchester, have recently closed their doors. And,
across the state, the retail industry has lost about 2,000 jobs in the
last year alone, according to Dennis Delay, an economist for the New
Hampshire Center for Public Policy.

But, while these numbers continue to
fall, industry analysts report that outlet stores have either maintained
or increased sales around the country. Across the map, general retail
sales rose an average of 1.4 percent from April 2010 to April 2011,
according to a recent consumer tracking study by the NPD Group, an
international industry company. By comparison, outlet sales jumped more
17.9 percent, more than 10 times as high, during that time period, the
study concluded.

“Consumers are much more careful today
with their shopping dollars,” said Jack Plunkett, president of Plunkett
Research, a Houston-based market research company that focuses on the
retail industry.

“They want to feel like their money is
well and wisely spent. … But they also want selection, and when they can
get it, they want a brand name,” he said. “An outlet mall, if it is a
good mall, it’s well positioned for today’s market.”

These trends are reflected locally, according to outlet managers around the region.

Officers at the Tanger Outlets in Tilton,
the closest outlet center, did not return calls for comment for this
story, but stores at the Kittery Outlets in Maine have thrived during
the recession, according to Lynn Smith, the center’s marketing manager.

To a one, each of the center’s 120 stores
have either maintained sales or grown over the last few years, Smith
said earlier this month.

Some stores, like Liz Claiborne clothing,
have closed because the parent company either shut down or downsized,
she said. But, in total, the outlets have maintained their yearly
average of about 5 percent turnover, meaning about five or six stores
close per year. And those vacancies still tend to fill quickly, Smith
said.

The Kittery outlets, located just across
the state border from Portsmouth, currently have two vacancies, which is
about average with or without a recession, she said. By contrast, more
than 9 percent of stores in traditional retail malls remain vacant,
according to recent study of the country’s 80 largest markets published
by Reis Inc., a New York-based real estate research company.

“You hear what’s going on around the
country and we just haven’t seen a lot of that,” said Smith, of the
Kittery Outlets. “People are still shopping. They’re just making smarter
decisions.”

From Kittery to Tilton to North Conway,
outlet shoppers generally don’t hesitate to drive a distance to find
their deals, according to industry analysts and business leaders. And
the Merrimack center’s location along a major traffic artery only
benefits it further, they said.

Positioned strategically between
Manchester and Nashua, the outlets will draw heavily from New
Hampshire’s two largest population centers, according to Chris Williams,
president of the Greater Nashua Chamber of Commerce.

And with the Massachusetts border less
than 20 miles away, Bay State shoppers will likely flood the area to
take advantage of the absence of a state sales tax, which will drive
prices down even further, Williams said.

“When you consider the proximity of
Merrimack to the Massachusetts border, I think you’ll certainly see a
lot of people from northern Massachusetts coming up here,” he said.

“But conversely, you’ll also have a lot of
residents in the central and northern parts of the state who will now
come down to Merrimack. … They’ll come from all over. This is going to
have a very tremendously positive impact on our retail economy.”